Revenue for the second quarter of 2012 was $26.7 million, representing a 54% increase compared to gross revenue2 for the same period in 2011.

Gross profit for the second quarter of 2012 was $18.8 million, representing a 52% year-over-year improvement compared to the same period in 2011, after excluding the $2.5 million reduction of revenue related to a common stock warrant issued in the same period in 2011.

Gross margin for the second quarter of 2012 was 70% compared to 71% in the same period in 2011, after excluding the $2.5 million reduction of revenue described above.

Bookings1, which Cornerstone defines as gross revenue plus the change in deferred revenue for the period, were $31.5 million for the second quarter of 2012, representing a 51% increase compared to the same period of 2011 and a 32% sequential increase from the first quarter of 2012. Deferred revenue at June 30, 2012 was $60.7 million, which was 69% higher than the balance at June 30, 2011 and 9% higher than the balance at March 31, 2012.

Cornerstone ended the quarter with over 1,000 clients and over 9.4 million users, representing 55% and 57% year-over-year growth and 12% and 15% sequential quarter growth, of Cornerstone’s client base and users, respectively.

“We have clearly seen a positive impact from the acquisitions of our primary competitors, not only in the segments of SMB and mid-market, but also in the large enterprise segment. Cornerstone’s momentum continued unabated through the first half of 2012, and we are investing in expanding our worldwide sales coverage to meet global demand while remaining fully committed to our clients’ success,” said Adam Miller, Cornerstone’s President and CEO.

Cornerstone’s net loss for the second quarter of 2012 was $8.2 million, or $0.17 loss per share, compared to a net loss of $7.1 million, or $0.15 loss per share, for the second quarter of 2011.

Cornerstone closed the acquisition of Sonar Limited, a provider of cloud-based talent management solutions, on April 5, 2012. Due to purchase accounting rules applicable to the acquisition, Cornerstone recorded an adjustment of $1.6 million to reduce to fair value the balance of deferred revenue attributable to contracts assumed from Sonar Limited. This fair value adjustment has the impact of reducing the amount of revenue attributable to contracts assumed from Sonar Limited by $0.7 million for the quarter ended June 30, 2012. Non-GAAP revenue, which excludes this $0.7 million reduction, was $27.4 million, representing a 58% increase compared to the same period of 2011.

Non-GAAP gross profit for the second quarter of 2012 was $20.4 million, representing a 63% year-over-year improvement compared to non-GAAP gross profit for the same period in 2011. Non-GAAP gross margin for the second quarter of 2012 was 74% compared to 72% in the same period of 2011.

Non-GAAP net loss for the second quarter of 2012 was $4.7 million, or $(0.09) per share, compared to non-GAAP net loss of $3.4 million, or $(0.07) per share, for the same period in 2011.1 Non-GAAP net loss is based on non-GAAP revenue and excludes, for the periods in which they are present, stock-based compensation and employer-related payroll taxes, amortization of intangible assets, acquisition costs, amortization of debt discount and issuance costs, early debt retirement expense, change in the fair value of preferred stock warrant liabilities, adjustments to taxes related to acquisition adjustments, and accretion related to preferred stock.

During the second quarter of 2012, net cash used in operating activities was $5.4 million compared to cash used of $5.0 million in the same period in 2011. Non-GAAP net cash used in operating activities was $5.3 million for the second quarter of 2012 compared to cash used of $5.0 million in the same period in 2011.1 Net cash used in operating activities was $2.4 million for the six months ended June 30, 2012 compared to cash used of $3.6 million during the same period in 2011.1 Non-GAAP net cash used in operating activities was $2.1 million compared to cash used of $3.6 million in the same period in 2011.

At June 30, 2012, Cornerstone’s total cash and cash equivalents were $67.0 million and accounts receivable were $32.8 million, yielding a total of $99.8 million.

1 Non-GAAP revenue, bookings, non-GAAP net cash used in operating activities, non-GAAP net loss, non-GAAP net loss per share, non-GAAP gross profit, and non-GAAP gross margin are non-GAAP financial measures. Please see the discussion in the section “Non-GAAP Financial Measures” and the reconciliations at the end of this release.

2 Gross revenue in the second quarter of 2011 excludes the impact of a non-cash reduction of revenue related to a common stock warrant issued to ADP of $2.5 million. Net revenue and net loss for the second quarter of 2011 was impacted by this non-cash reduction of revenue.

3 Includes contracted clients and active users of any combination of our four integrated cloud-based solutions, consisting of recruiting, learning, performance, and extended enterprise as of the end of the period. Our client and user counts exclude our Cornerstone Small Business Solution, or “CSB”.

Quarterly Conference Call
Cornerstone OnDemand will host a conference call to discuss its second quarter 2012 results at 2:00 p.m. PT (5:00 p.m. ET) today. A live audio webcast of the conference call, together with detailed financial information, can be accessed through the company’s Investor Relations Web site at http://investors.cornerstoneondemand.com/events.cfm. The live call can be accessed by dialing (888) 357-3694 (U.S.) or (973) 890-8276 (outside the U.S.) and referencing passcode: 17894091. A replay of the call will also be available at http://investors.cornerstoneondemand.com/events.cfm or via telephone until 12:00 a.m. PT on August 13, 2012 by dialing (855) 859-2056 (U.S.) or (404) 537-3406 (outside the U.S.), and referencing passcode: 17894091.

About Cornerstone OnDemand
Cornerstone OnDemand is a leading global provider of a comprehensive learning and talent management solution. We enable organizations to meet the challenges they face in empowering their people and maximizing the productivity of their human capital. Our integrated software-as-a-service (SaaS) solution consists of the Cornerstone Recruiting Cloud, the Cornerstone Performance Cloud, the Cornerstone Learning Cloud and the Cornerstone Extended Enterprise Cloud. Our clients use our solution to source and recruit top talent, develop employees throughout their careers, engage all employees effectively, improve business execution, cultivate future leaders, and integrate with their external networks of customers, vendors and distributors. We currently empower approximately 9.4 million users across 180 countries and in 34 languages. www.csod.com

Forward-looking Statements
This release contains forward-looking statements, including statements regarding Cornerstone OnDemand’s future financial performance, market growth, the demand for and benefits from the use of Cornerstone OnDemand’s solutions, and general business conditions. Any forward-looking statements contained in this press release are based upon Cornerstone OnDemand’s historical performance and its current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent Cornerstone OnDemand’s expectations as of the date of this press release. Subsequent events may cause these expectations to change, and Cornerstone OnDemand disclaims any obligation to update the forward-looking statements in the future. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, our ability to attract new clients; the extent to which clients renew their subscriptions for our solution; our ability to compete as the talent management provider for organizations of all sizes; changes in the proportion of our client base that is comprised of enterprise or mid-sized organizations; our ability to manage our growth, including additional headcount and entry into new geographies; the timing and success of solutions offered by our competitors; unpredictable macro-economic conditions; reductions in information technology spending; the success of our new product and service introductions; a disruption in our hosting network infrastructure; costs and reputational harm that could result from defects in our solution; the success of our strategic relationships with third parties; the loss of any of our key employees; increased demands on our infrastructure and costs associated with operating as a public company; failure to protect our intellectual property; acts of terrorism or other vandalism, war or natural disasters; changes in current tax or accounting rules; unanticipated costs or liabilities related to businesses that we acquire; and other risks and uncertainties. Further information on factors that could cause actual results to differ materially is included in Cornerstone OnDemand’s reports filed with the SEC, including its Form 10-K filed with the SEC on March 6, 2012, and subsequent report filed with the SEC, including its Form 10-Q filed on May 15, 2012.

Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP, Cornerstone OnDemand has provided in this release certain measures that have not been prepared in accordance with GAAP. These non-GAAP financial measures include (i) non-GAAP revenue, which is defined as gross revenue plus revenue not recognized in the period due to the impact of purchase accounting rules on deferred revenue acquired through acquisitions, (ii) bookings, which are defined as gross revenue plus the change in deferred revenue for the period, (iii) non-GAAP net cash used in operating activities, which excludes acquisition and acquisition-related costs and employer-related taxes from stock-based compensation, (iv) non-GAAP net loss and non-GAAP net loss per share, which are based on non-GAAP revenue and exclude, for the periods in which they are present, stock-based compensation and employer-related payroll taxes, amortization of intangible assets, acquisition costs, adjustments to taxes related to acquisition adjustments, amortization of debt discount and issuance costs, early debt retirement expense, change in the fair value of preferred stock warrant liabilities, and accretion related to preferred stock, and (v) non-GAAP gross profit and non-GAAP gross margin, which are calculated based on non-GAAP revenue and exclude stock-based compensation and amortization of certain intangible assets reflected in cost of revenue.

Cornerstone OnDemand’s management uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to the corresponding GAAP measures, in evaluating Cornerstone OnDemand’s ongoing operational performance and trends and in comparing its financial measures with other companies in the same industry, many of which present similar non-GAAP financial measures to help investors understand the operational performance of their businesses. However, it is important to note that the particular items Cornerstone excludes from, or includes in, its non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure. A reconciliation of the non-GAAP financial measures to such GAAP measures has been provided in the tables included as part of this press release.